Tesla is reportedly embroiled in a legal battle with the California Department of Motor Vehicles (DMV) over allegations that the EV manufacturer has overstated the capabilities of its autopilot and full self-driving technologies and misled consumers, Bloomberg reported.

The hearing in Oakland, which began on Monday, could result in the suspension or revocation of Tesla's dealer licence in California.

This legal battle coincides with a separate jury trial in Miami, where Tesla's Autopilot is under scrutiny following a fatal 2019 collision.

The DMV alleges that Tesla made "untrue or misleading" statements in 2021 and 2022 while advertising that its vehicles could operate autonomously without driver intervention.

The California DMV's complaint, amended in November 2023, asserts that Tesla's vehicles equipped with driver-assist technology “could not at the time of those advertisements, and cannot now, operate as autonomous vehicles.”

Tesla is currently embroiled in a dispute with the California Department of Motor Vehicles (DMV) regarding the marketing of its Autopilot and Full Self-Driving technology. The DMV alleges that Tesla made "untrue or misleading" statements about the capabilities of its driver-assistance systems.

In filings, Tesla has argued that the remarks fall under the protection of free speech as guaranteed by the First Amendment of the US Constitution.

The company stated in February 2024 filing that: “Tesla repeatedly and explicitly makes clear that its vehicles are not autonomous and require active driver supervision.”

The company's attorneys have also stated that the promotional statements referenced by the DMV are being misinterpreted, arguing that the regulatory body is not adequately acknowledging the cautions and disclaimers Tesla has provided regarding its systems.

Federal safety regulators have investigated multiple Autopilot crashes, leading to a recall of two million cars in 2023 due to concerns that the system does not adequately ensure driver attentiveness.

The automotive industry uses a classification system ranging from Level 0 to 5 to denote the degree of automation in vehicles.

Tesla's Autopilot is said to be classified as Level 2, which needs continuous driver input and supervision.

As the Oakland hearing approaches, both the DMV and Tesla have refrained from commenting.

Last month, Tesla faced a lawsuit over a fatal accident in New Jersey, US, where a 2024 Model S, equipped with autopilot and full self-driving features, was involved in a crash that killed three family members.